American Water (AWK) Unit to Invest $8.4M in Three Projects

American Water Works AWK announced that its unit, New Jersey American Water will invest $8.4 million in three different projects to strengthen water and wastewater infrastructure in its service region. The company keeps on upgrading old infrastructure and adding new assets to provide reliable services to its customers.

Proper maintenance and upgrade of the old infrastructure allow the company to meet rising demand from its residential and commercial customers and assist firefighters during emergencies.

New Jersey American Water keeps on making the necessary investments to upgrade and maintain its assets. In 2023, the company invested $507 million in different projects to upgrade critical systems and maintain high-quality services. The company will continue to invest in 2024 as evident from its recent investment in upgrade projects.

Details of the Projects

New Jersey American Water will invest $4.7 million to replace nearly one and a half miles of aging water main in Hainesport and Haddonfield. In another project, the company will invest $3.2 million to replace around 3,200 feet of aging water main in New Providence. On the border of Galloway and Egg Harbor City, the company will invest $0.5 million to replace 1,600 feet of aging water main.

Investment Required in Water Space

Per the U.S. Environmental Protection Agency, investments of $625 billion and $271 billion are necessary to maintain and expand drinking water and wastewater pipelines, respectively, to meet demand over the next 20 years. Water infrastructure, including water mains, storage tanks and purifying units, needs maintenance at proper intervals.

American Water aims to invest $3.1 billion in 2024, with a major portion utilized for infrastructure improvements in regulated businesses. AWK aims to invest in the range of $16-$17 billion from 2024-2028 and $34-$38 billion in the 2024-2033 period.

Other water utilities like Essential Utilities WTRG, California Water Service Group CWT and Middlesex Water MSEX have well-chalked-out capital investment plans to strengthen infrastructure.

Essential Utilities plans to invest $1.3-$1.4 billion in 2024 for more than 5,000 planned projects and $7.2 billion in 2024-2028 to improve water and natural gas systems to better serve customers with the help of improved information technology.

California Water Service plans to invest more than $380 million in capital expenditures in 2024.

Middlesex Water plans to invest $237 million during 2024-2026 to strengthen its water and wastewater infrastructure to service customers in a safe, reliable and efficient manner.

The current dividend yield for WTRG, CWT and MSEX is 3.1%, 2.1% and 2.3% respectively, which is better than the Zacks S&P 500 composite’s yield of 1.58%.

Price Performance

Over the past three months, American Water has gained 9.5% compared with the industry’s 9.2% growth.

 

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Zacks Rank

American Water currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


 

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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